Compared to a situation in which there is no change in the value of the dollar relative to the peso, in which of the following situations would you be worse off?
A) you borrow $10,000, you earn income in pesos, the dollar appreciates against the peso, you must pay back the loan in dollars
B) you borrow $10,000, you earn income in pesos, the dollar depreciates against the peso, you must pay back the loan in dollars
C) you borrow 10,000 pesos, you earn income in dollars, the dollar appreciates against the peso, you must pay back the loan in pesos
D) you borrow 10,000 pesos, you earn income in pesos, the dollar depreciates against the peso, you must pay back the loan in pesos
A
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Firms will merge or one firm will acquire another for all but which of the following reasons:
A) one large firm has a cost advantage over two smaller firms. B) synergies involved between the two firms. C) to enter a new market. D) to diversify risk. E) one large firm can sell more than two smaller firms.
If the MPC is 0.8 and disposable income shrinks by $100 million. Consumption would
a. rise by $8 million b. rise by $80 million c. fall by $80 million d. fall by $8 million e. fall by $20 million
If the demand for hand-sewn leather shoes increases, it is highly likely the demand for:
A. all shoe-types will also increase. B. skilled sewers will increase. C. needle and thread will decrease. D. leather will decrease.
Which of the following would be expected if the tariff on foreign-produced automobiles were increased?
A. The domestic price of automobiles would fall. B. The supply of foreign automobiles to the domestic market would decline, causing auto prices to rise. C. The number of unemployed workers in the domestic automobile industry would rise. D. The demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations.